Construction output falls for second consecutive month

Construction output falls for second consecutive month

Output in the UK construction sector fell 0.5% in volume terms in August, according to the Office for National Statistics.

The fall follows an upwardly revised decrease of 0.4% in July 2023, with the monthly value in level terms in August 2023 at £15,584 million.

The decrease in monthly output came solely from a decrease in new work (1.5% fall), partially offset by an increase in repair and maintenance (1.0%) on the month.

At the sector level, five out of the nine sectors saw a fall in August 2023, with the main contributors to the monthly decrease seen in private commercial and private new housing, which decreased 4.1% and 1.4%, respectively.

Alongside the monthly decrease, construction output saw an increase of 0.9% in the three months to August 2023; this came from increases in both new work (0.9%), and repair and maintenance (0.9%).

“Recovery in the sector still looks some way off while interest rates remain high and caution is still the watchword for many investors, especially in the critically important housebuilding sector where demand remains dampened, said Clive Docwra, managing director of property and construction consultancy McBains.

“Longer-term, the scaling back of HS2 is also likely to have a knock-on effect in terms of new commercial and infrastructure contracts further down supply chains, so the outlook is now increasingly uncertain in other work sectors too.”

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